Journal of Supply Chain Management

"One on One: An Interview with Helmut F. Porkert" By Kristen Kioa, Winter 2001, Vol. 37, No. 1, p. 2

One on One: An Interview with Helmut F. Porkert

Journal of Supply Chain Management Copyright © February 2001, by the Institute for Supply Management, Inc.

Author(s):

Kristen Kioa
Kristen Kioa, senior associate, media relations for NAPM.


Helmut F. Porkert is chief procurement officer of the global procurement organization at Chevron Corporation. He directs the com-pany’s recently created global procurement, strategic sourcing, and supplier management activity. Prior to Chevron, Mr. Porkert held positions at Atlantic Richfield Company and at Bayer. Mr. Porkert received his Ph.D. in organic chemistry from the Technical University Stuttgart, Germany.

The Journal of Supply Chain Management:
Chevron Corporation, one of the world’s largest integrated petroleum companies, is involved in every aspect of the industry, from exploration and production to transportation, refining, and retail marketing, as well as chemicals manufacturing and sales. It is active in more than 100 countries and employs about 31,000 people worldwide. Explain your role within the organization.

Helmut F. Porkert:
I am the chief procurement officer for Chevron Corporation reporting to the executive vice president of operations. The global procurement organization provides a center-led governance for procurement strategies, principles, and processes for all global third-party materials and services spend.

The Journal:
What challenges is your organization facing? Are any unique to your industry?

Porkert:
The "global marketplace" is not yet truly global — many "global" companies have not expanded beyond the United States, Europe, and some parts of Asia, and the "new economy" is still reliant on the "old economy" laws, infrastructure, and technologies. This sometimes impedes or slows progress. Areas that are unique to our industry and organization are greater consolidation of and com-petition within the energy industry.

The Journal:
How is purchasing and supply helping to solve these challenges?

Porkert:
Key global procurement strategies support corporate strategic intents of operational excellence, cost reduction, capital stewardship, profitable growth, and organizational capability. The global procure-ment organization is a major contributor to finan-cial and operational results through strategic sourcing, supplier integration, capital project procurement, and exploitation of e-commerce technologies.

The Journal:
Where are you taking purchasing and supply management in your organization?

Porkert:
We are building an organization that is strategic to and integrated with the business. We are moving away from administrative processes to busi-ness processes focused on integrated cost manage-ment and value creation, managed by individuals with multidisciplined technical backgrounds and a keen sense of operational and business acumen. Additionally, we are standardizing the transaction and asset management processes, and moving these to e-commerce platforms.

The Journal:
What have been your successes?

Porkert:
Delivering sustainable cost reductions to the enterprise through strategic sourcing and supplier integration; becoming recognized as credible partners in delivering business results to our business units; establishing a rigorous strategic sourcing and sup-plier integration process for all materials and services spent; and developing an e-procurement platform that standardizes and maximizes efficiencies in the transaction process.

The Journal:
What areas are you and your organi-zation working on?

Porkert:
We are currently working on strategic sourcing, supplier management and integration, cap-ital project procurement and asset management, e-procurement, as well as training and development of procurement and supply chain process professionals. A challenging list, but once completed, one that will keep us on the supply management competitive edge.

The Journal:
How is your organization preparing to use the Internet as it relates to future trends in purchasing and supply management?

Porkert:
Chevron positioned procurement already two years ago to capture the opportunity of B2B tech-nology, when it signed up with Ariba to develop and apply the new Internet technology. Since then, we "incu-bated" and continuously developed e-procurement inter-nally; one of our operations in California has placed over 90 percent of their routine materials orders through the Internet over the last nine months. Six months ago, Chevron co-founded Petrocosm together with Ariba, Requisite, and Cross-Point Partners. Texaco and Petrobras have joined Chevron as founders of this independent and neutral oil and gas industry marketplace. By 2002, we expect to place up to 90 percent of all our orders for materials and services over the Internet. This will allow for reduced cycle time, reduced inventories, plus a significant cost reduction. E-procurement is the enabler of Chevron’s strategic sourcing and supplier management strategy.

The Journal:
What has been the biggest lesson you have learned in purchasing and supply management?

Porkert:
I have learned many important lessons. For example, rigorous and comprehensive strategic sourcing and supplier integration processes are key to "breakthrough value creation." Managing supply chain and procurement as business processes with clear performance targets established is very impor-tant as well. An organization must create credible business cases for sourcing decisions and under-stand price and market drivers — it needs varied approaches for different markets. One must also realize that change management and communica-tion are critical.

The Journal:
What kinds of research would you like to see being done on behalf of purchasing and supply management?

Porkert:
I envision strategic sourcing in world mar-kets — "world-class" processes and nontraditional approaches. I would like to see more advanced research into what makes "world-class" companies "world-class" and how to get there. I believe there is also a need for market research on specific material and service commodities.

The Journal:
What is the future for purchasing and supply management in general and at your organi-zation in particular?

Porkert:
At Chevron, there will be a focus on an increased emphasis on the strategic rather than the tactical aspects of procurement (procurement trans-action processes will be automated and/or outsourced). Increased integration of suppliers into the business (integrated work processes, standardized specifica-tions, shared equity arrangements) is a goal of ours. There will also be greater emphasis on global supplier/ logistics management, consortiums, integrating first-tier and second-tier spend, and greater emphasis on strategic cost management to gain TCO (total cost of ownership) performance results with strategic suppliers. New procurement competencies that include economic and market analysis, advanced negotiating techniques, influencing and leadership skills, change management, and technological apti-tude will affect not only Chevron but the entire supply management field.

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